"There is no fundamental contradiction between socialism and a market
economy. The problem is how to develop the productive forces more
effectively. We used to have a planned economy, but our experience over
the years has proved that having a totally planned economy hampers the
development of the productive forces to a certain extent. If we combine a
planned economy with a market economy, we shall be in a better position to
liberate the productive forces and speed up economic growth." Deng
Xiaoping

Course Description and Introduction:

This is a seminar course in the comparative analysis of variant
types of capitalist and non-capitalist social formations and the
transition of social formations from one set of prevalent characteristics
to a new and radically different set. This question of transition is
not simply an issue of description. Reality is not
naturally broken down into discrete sets of phenomena such that
the concepts we use in analysis are obvious and universal to all social
scientists. Social formations
are comprised of a potentially infinite set of distinct combinations of
characteristics. How do we decide on a finite set of characteristics
useful in helping us achieve a better understanding of the social
formation/society and how it is changing over time?

We come to the project of understanding social formations (and that
aspect of the social formation described as economic processes) having
been trained to see specific aspects of reality as coherent
processes, events, relationships, objects, subjects. We learned to
see certain things when we learned distinct languages. As seminar
students, you have also been exposed to at least one economic
theory. Theory (also referred to as theoretical framework or
paradigm) provides us with a rigorous language of analysis by which we can
consistently and non-arbitrarily see or recognize sets of
characteristics and to relate these sets of characteristics (concepts) in
a logical and consistent fashion. Theory is a language that attempts
to achieve coherence and non-ambiguity. In one sense, using the
terms "social formation" and "capitalist" simply implies a language (and
not necessarily a theory) within which these words carry some sort of
meaning, which could be metaphorical or otherwise ambiguous, evoking
multiple meanings, and/or inconsistent. However, if these terms are
to be used to produce an unambiguous, distinct, and consistent meaning,
from which we may produce an understanding of the way society works (to
use Veblen's phrase, to increase our "useful knowledge") then the terms
must reside within a particular theoretical framework that will be
deployed for this purpose. The theoretical framework that most
economics students are taught in introductory and intermediate
microeconomics (and, to a significant extent, in similar macroeconomics
courses) is called neoclassical economics (although the influence of
neoclassical economics is not as consistent in the macro context, the
trend has been to remove non-neoclassical elements from macro over time,
moving it consistently in the direction of its theoretically purer
microeconomic cousin and, simultaneously, away from the unique
contributions of Keynes and others to the macro paradigm). Why not
just use neoclassical eocnomics in comparative economic systems?
Firstly, comparative economic systems requires an explicit recognition of
the existence of multiple economic systems, understood to be alternatives
and treated as non-prejudicially as possible. Neoclassical theory
has no such conception of systems. At best, the neoclassical
framework has been used to pose a bipolar world of market based
societies/economies and non-market-based societies/economies. The
gross simplicity of this dichotomy generates a monochromatic understanding
of economic systems that loses much of the richness in the actual
societies that have comprised human history and that exist in the present
moment, much less any ability to speculate on future
societies/economies. Secondly, this simplistic understanding of the
nature of societies/economies allows for only two possible transitions: a
transition into a market-based society and a transition away from a
market-based society. The economic and social science literature has
been much richer than this for most of its history. It appears to be
a backwards step to reduce the complexity of comparative economic systems
and systemic transitions to the bipolarity allowed for
within the neoclassical paradigm. For example, it is not difficult
to find within the non-neoclassical economics literature complex
descriptions of feudal societies that have undergone
transitions to capitalist societies and petty commodity producing
societies that have undergone transitions to feudalism and/or
capitalism. And how can
anyone understand the history of the United States without also
understanding the dynamics of a transition from a slave society (that was
largely a free market society) to a
society where slavery is illegal, no matter what the dominant form of
post-slave production? Thirdly, neoclassical economic theory is
tainted by its primary function as a polemical device arguing in favor of
the notion that relatively unfettered market transactions result in a
non-exploitative society. This assumption (marginal productivity
theory) is foundational within the neoclassical paradigm. Indeed,
neoclassical theory was a response to the work of Marx and others
following Marx who argued that a society based on the wage labor contract
where workers are dispossessed of the means of production resulted in
exploitation (understood as a form of legitimized theft). Marx's
criticisms of capitalism, in particular (he also criticized slavery and
feudalism as exploitative systems), posed a serious challenge to the
social order that was rapidly taking hold in the industrialized
world. Neoclassical economic theory became a weapon in fighting
against this iconoclasm. As social scientists we must adopt a
less polemical position, recognizing that, among the distinctions within
societies, is the relative degrees to which institutional structures and
relationships foster or impede this social phenomenon called
exploitation. It is not science to presume it away
prior to conducting the analysis, as is the case with the neoclassical
paradigm.

We should also be aware, however, that traditional courses in
comparative economic systems (CES)
were products of Cold War polemics: economic systems
were categorized based upon the officially recognized distinction between an idealized set
of dominant politico-economic institutions of the NATO countries (the
"West") and a similarly idealized set of
dominant politico-economic institutions of the CMEA countries (the
"East"). The basic
dichotomy generated by this polemic was an outgrowth of the neoclassical
paradigm: the dichotomy between "free
market" or "market capitalist"
economies and "command" or "command socialist" or "centrally planned"
economies. The distinction was meant to be absolute: thesis
counterposed
to anti-thesis. While it is undeniable that the experiment in
centralized, command planning in the USSR and the larger CMEA was both
noteworthy and distinct from the more decentralized planning in USA-style
capitalism, it is a stretch to go from this
particular distinction to the idea that these two examples of social
formations had nothing in
common (both in terms of social institutions and processes, especially the
underlying class processes occurring within
CMEA and NATO firms).
Command elements in the NATO
politico-economic social
structures were largely or completely ignored, as were similarities in the
underlying
economic relationships within
NATO and CMEA firms (including
both command and central planning aspects, even if in microcosm, and
common
class processes). This dichotomy further ignores the flexibility
of capitalism and the constantly changing mix of state intervention (into
market exchange relationships, the conditions shaping worker freedoms and
unfreedoms, firm governance, etc.), including occasional direct state
involvement in productive investment and production even in the most
liberal NATO member states, such as the U.S.A., during certain historical
periods when "free market" approachs are deemed insufficient to resolve
economic crises. Early in the semester, we will discuss alternative
theoretical approaches to understanding the former Soviet Union (and other
CMEA nations), including alternative versions of Marxian theory.

The number of concepts relevant to conducting comparative economic
systems and economic transition research and analysis is rather large and
we should not anticipate finding any singular paradigm that satisfies all
possible research questions. Institutional economists, Marxists, the
German Historical School, post-Hegelians, Marxists, and others have all
tackled questions of typology of social formations/societies and the issue
of transition, positing a wide range of concepts relevant to such
analyses. In this course, we are open to exploring any and all of
them. We will not presume a concept is useless, unless it is proven
to be so. Nevertheless, we are restricted to utilizing concepts that
can be gleaned from the broad economics literature or that tiny subset
that we will read and discuss in this class. If any student wants to
expand our reading in order to add to this set of concepts, logics, modes
of analysis, etc., she should feel free to do so. This course will
be approached in as open-minded a way as is possible, given the
constraints of developing a basic shared language of debate and
analysis. One exception to this open-mindedness is the issue of
ontology. We will share, at least in the context of course debate
and your course presentation(s) and paper, the overdeterminist ontological
position which argues in favor of the necessary significance of all
phenomena. In other words, if it exists, whether in material or idea
form, then it is a significant factor in shaping social dynamics and
change. We will take this ontological position as axiomatic.
Thus, no one need worry that there argument about the significance of
factor X will be dismissed, so long as factor X can be shown to exist.

Furthermore and in keeping with the attempt to develop some common
linguistic rules, one concept that will be given particular weight
in the discourse, although we will avoid assuming this concept is somehow
more important than
other useful concepts, is the concept of class processes. Class
processes are based on a particular subset of economic relationships and
served a role in most early attempts at typology and transitions
analysis. Nevertheless, during the Cold War CES period, the concept
of class largely disappeared from the economics discourse (or was
bastardized to the point of losing any unique and unambiguous
meaning). How has it been possible to debate economic
systems without reference to class processes (an historically
important concept in exploring the differences and similarities between
societies and probably one of the earliest concepts to be used in
comparative economic systems and transition research)? Prior
definitions of
capitalism,
feudalism,
self-employment (ancientism or economic individualism), and
communism
(in
particular those based upon different systems for the production
and appropriation of
surplus labor, rather than the
Proudhonian notion of
capitalism and
socialism as based upon the ownership of means of
production --- which Marx labeled "utopian socialism")
were ignored by authors of mainstream
textbooks in CES. (Indeed, these textbooks even ignored the "power
essentialist" approach of such notable social analysts as Raya
Dunayevskaya, C.L.R. James,
Rudolf Hilferding, and Charles Bettelheim, all
of whom argued that
the Soviet Union was a variant form of capitalism.) Instead,
additional (and related)
dichotomies were
created based upon idealized features of
the West and East: most notably,
allocation (market versus command) and
ownership (private versus
state). Ironically, not only did this analytical bipolarism result
in an
inability to recognize a much wider range of economic systems
(how are we to distinguish, for instance, the free market capitalism of
the New England states from the free market family farms of the West
during the early history of the USA or both of these from the free market
slavery of the ante-bellum South?), but
also blinded CES specialists to important similarities (such as those
focused upon by the "power essentialists" mentioned above, as well as
surplus labor appropriation similarities) between certain NATO and CMEA
social formations.

And most CES texts
tended to presume a one-to-one correlation between
"socialism" and command political processes (undemocratic processes of
decision and rule making). Again, this was a case of polemics
overshadowing science: it would have been relatively easy for the authors
of CES texts to find substantial
evidence, in both the academic literature and in real
world institutions and political organizations, for a
tradition of "democratic socialism," including such mainstream political
parties as the Swedish Social Democratic Party and such social theorists
as Eduard Bernstein (see his text Evolutionary Socialism, 1961). It would also not be
difficult to find clear evidence for the compatibility of
command and capitalism
in such historical
social formations as Nazi Germany,
apartheid South Africa, Pinochet's Chile, or even the pre-Civil Rights Era
former confederate states of the U.S.A.
And all capitalist firms,
whether within the NATO or CMEA territorial boundaries, state,
public shareholder
or
privately owned, were organized
non-democratically and provided workers with no ownership rights to the
fruits of their labor (to make a point that John Locke wrote about before
the United States existed). A significant number of economists, most
notably Samuel Bowles, Richard Edwards, David Gordon, Michael Reich, and
Thomas Weisskopf, have written about the command structure of capitalist
firms for many years.

To be fair, many CES textbooks mentioned such phenomena as
indicative planning, a form of non-command central planning that
played a critical role in the post-World War II success of Japan and is
part of the "Japanese model" followed by such countries as South Korea,
Taiwan, and Malaysia. The authors might also have added the
various
central planning agencies existing in even the most anti-planning (at
least in polemical terms) NATO social formations, such as the U.S. Federal
Reserve and similar central authorities for planning monetary
variables. Nevertheless, these deviations are always taken as
relatively
unimportant exceptions to a supposed ideal "free market" capitalism, and
certainly not indications of similarities to the anti-ideal of "command
socialism." In other words, the absolutes rule!

And there is no question that the
West versus East
dichotomy was
oppressively absolute
within this Cold War
framework.
Thus, the collapse of the CMEA governments created
a crisis within
the traditional field of comparative economic systems (CES).
However, this seminar (since its inception in 1989)
has diverged sharply from
the traditional Cold War
approach to the teaching of CES, and
has taken the unique path of treating the study of economic systems as a
scientific problem,
rather than an exercise in polemics. Therefore, systemic
differences (and
similarities)
are
not presumed but are the subject of analysis. We begin by
defining the objects and processes linking the objects of our concern,
examine
the
evidence, from the present and/or the past, using our
carefully defined object/concepts
and non-deterministic logic, and see where it takes us.
In this spirit, each course has begun with an
intense exploration
of the theoretical frameworks within which systemic difference can be
analyzed, including
a careful examination/construction of the definitions necessary to such
analysis.

Part of the problem with CES is really a larger problem with the
economics profession. Economics is not a pure science. It is strongly
influenced in its language, concepts, and logic by having served, from
its origins, an ideological role as defender of the status quo. This
status quo includes a determinate institutional structure. This
institutional structure is comprised of social relationships and
processes that need to be objectively
examined in CES analysis. And this structure of social
relationships is presumed to be both natural and superior to any
alternative set. This is not demonstrated, it is embedded in the
logic of the theory. To make matters worse, the structure of
social relationships (and human psychology) that serves as the
foundation for the neoclassical theory (the basis of the logic)
leaves out much of reality and posits a reality that is, in most
instancts, not really there at all (or is oversimplified to the
point of becoming a fantasy). However, to objectively analyze the
attributes of social formations for the purpose of locating significant
differences in economic systems (producing the necessary typology of
economic systems), one must not presume away any aspect of reality or
presume its insignificance, much less make up attributes (of social
relations or individuals) that are unproven or, as is often the case, have
been proven to be false by other sciences or non-mainstream economists).
Indeed, to be scientific about CES analysis means to be open to
uncovering surprises in the systemic differences between social
formations, including systemic differences that have occurred within any
given social formation over time (for example, the presence of significant
transitions from one type of social formation to another in the United
States). It also means being open to the possibility that alternative
structures to those present in the United
States or any other social formation may be found to be "superior" in
some sense. The contradiction should be clear. An
economist who is trained to defend the status quo cannot simultaneously
produce an objective analysis of that status quo and alternatives to that
status quo.

Making use of the post-structuralist ontology of overdetermination, we will
rethink economic phenomena and economic systems
as the product of the complex
interaction of cultural, political, environmental, and economic
processes. Thus, while economics is our starting point, we
necessarily (because of employing an open theoretical framework)
must discuss the role of
cultural, political, and environmental processes in shaping economic
differences between social formations. CES analysis
is grounded in the creation of meaningful categorical differences between
national economies (economies that are already differentiated on the basis
of political boundaries). Such categorical differences might be based
on a wide range of factors, including, but not limited to, i) property
relationships, ii) market relationships, iii) class
relationships, and, iv) relative involvement of the state in economic relationships.
The first possible categorical difference can itself be subdivided between
a) property relationships involving control over the economic enterprise
or firm or b) property relationships involving control over the output
of economic enterprises or firms. The other categories are also amenable
to subdivisions. The third possible categorical difference, class
relationships, involves answering the questions of who produces and who
appropriates and distributes economic surpluses and by
what social mechanism is this arrangement made possible. However,
different
economic theories produce different understandings of what is an "economic
surplus." Thus, within the course we will need to explore both the
question of how do we define difference and how do we understand the concepts
upon which that defined difference is based. These are interesting
and provocative issues and students should be prepared to debate them in
the seminar. Students will also need to understand these issues sufficiently
to produce a
semester paper and to make a class presentation related to
this semester paper.

When is ownership important? What
kinds of ownership are important? Why
does it matter if the direct producer (worker) has an ownership stake in
the goods she produces? How are
agency costs implicated in the problems of state-owned enterprises and
are these agency costs significantly different than the ones found in corporations
with widely dispersed public shareownership? What is the role of the state
in shaping differences and similarities between existing (and historic)
economic systems? What is the role of cultural institutions and processes,
such as nationalism and racism, upon the reproduction of similarities and
differences in economic systems (and variant forms of economic systems)?
What forces do population pressures or a relative scarcity of natural resources
play in shaping the social formation, including the economic system? These
are the types of questions that will come up during our discussions. We
will try to avoid relying upon simple, economic determinist arguments,
although we will identify many such arguments in the economics literature.
Our approach will be open-minded, in the sense that we will allow for the
possibility that the complex similarities and differences in social formations
(and the underlying economic systems) is the combined product of the aforementioned
cultural, political, environmental, and economic processes but cannot
be reduced to any one subset of these. This is no minor matter. It allows
the participants in the seminar a wider degree of freedom in exploring
the forces shaping economic systems than might otherwise be the case. This
freedom extends to the student's choice of thesis for her
semester research paper.

What are some of the specific topics and case studies that may be
examined in the course? The primary focus of this semester's EC 321 will
be China. China has been growing at an extraordinary rate, approaching
ten percent per annum, for the past three decades. The growth
generated by China is a product of its economic system(s) and the
particular type of transition(s) it has undergone. We will
extensively discuss the possible definitions of these systems, their
internal dynamics, and the path from one system to another. We will
also attempt to understand the extraordinary value creation that seems to
have driven the rapid economic growth and transformation in China's
economic and social infrastructure.

We will
also spend some time discussing India, Iran,
and the kibbutz system in Israel. However, the first case that will be
explored will be the now defunct (but nevertheless theoretically
important) USSR. Students should feel free to suggest changes to this
syllabus, including adding social formations and/or transitions to the
table for analysis and debate, as well as omitting topics of lesser
interest. Final decisions will be made
democratically by the seminar
participants. Past topics have included: The theoretical implications
of the recent economic crisis in Asia; the end of the Soviet economic experiment
(What sort of economic system did Stalin build?); dramatic economic and
financial sector reforms, extraordinary growth rates, and the restructuring
of state-owned enterprises in China; the reshaping of capitalism in
India with economic reforms and the development of the high tech
sector; The crisis of
capitalism in Argentina and Brazil: lessons for Eastern Europe and Asia; the
relationship between economic reform and corruption in Viet Nam; big
bang reforms in Japan (Are we entering an era of a new form of Japanese
capitalism?); political reform and the crisis of the chaebol system in
South Korea; the communal system of the Israeli kibbutz (Does this form
of
communism offer a real alternative to capitalism?); and Islamic
economic
systems in theory and practice.

Requirements: The most important requirement to take this course
successfully is a willingness to learn new concepts and ways of
thinking. This course meets the International Relations
requirement.
Experience with the concept of overdetermination and/or a
course in Marxian theory, economic development, corporate finance,
economics in film, U.S. economic history,
or Asian economies may be useful, but not required. If you are concerned that you are
unprepared for such an adventure as this course represents, have a look at
one or both of the primary texts, Class Theory and History by Resnick and
Wolff and Chinese Capitalism and the Modernist Vision by
Gabriel, both of which are on reserve.
If you find these texts impenetrable, you may have similar difficulty
in
the course. In any event, comparative economic systems is a
challenging course, in part, because
it requires students to learn new ways of thinking about economics and
ways of applying theory. The path
to obtaining the necessary conceptual skills required in such a course
is not singular.
Any student who is concerned that she may have inadequate preparation for
this course should feel free to contact me at extension 2818 or by e-mail
(sgabriel).

In the calendar below, please note that all readings listed for a particular
date should be read prior to that date. Students are expected
to
be prepared to discuss these readings on the date they are listed.
Keep in mind that participation in classroom discussions is an important
element in learning and, therefore, in grading. This is even more the case
when a guest speaker appears in the seminar. On such days, you are each
expected to ask questions and otherwise actively engage the speaker.

Resnick & Wolff. Class Theory and History: Capitalism and
Communism in the USSR. This text is supplementary this semester,
rather than required. The theoretical material in this text remains
important, but is available in other texts, which are on reserve, most
notably Resnick and Wolff's Knowledge and Class, and Wolff and
Resnick's Economics: Marxian versus Neoclassical. We will not,
however, have the sort of lengthy discussion of the USSR that was
done in other iterations of the seminar, in order to accomodate the desire
of current participants to open up a discussion of West and East Africa
and to expand on past discussions of the European Community.
Chinese Capitalism and
the Modernist Vision, which is on reserve,
provides the primary theoretical approach underpinning
the course. You should read as much of this text as possible and
ask questions about any concepts or arguments that you believe should be
clarified or simply elaborated. You are not required to use the same
theoretical framework as embodied in this course. However, you must adopt
a theoretical framework appropriate to comparative systems analysis, which
excludes the neoclassical paradigm, but could include any number of
institutionalist or Marxian paradigms. We will discuss this issue at
length early in the seminar. You have to take responsibility for making
your own choice of theoretical framework and make sure that this framework
does fit the requirements of this course. Papers written for other
courses are unlikely to meet these requirements (and, in general, violate
the spirit of the semester research requirement).
To reiterate, your
semester paper must demonstrate understanding of the theoretical
concepts and arguments put forward in the seminar, although
this need not necessarily restrict your choice of paradigm to the one
utilized in Chinese Capitalism and the Modernist Vision.
If you would like your own copy of this text (it is very expensive, which
is why I decided against requiring you to have the text), then you can
obtain the
electronic version by clicking the link on this URL: Chinesecapitalism.com.)
It is also available at Amazon, Barnes & Noble,
directly from the publisher, etc. We will be reading and discussing
the variant forms of Marxian theory discussed in Chinese
Capitalism and the Modernist Vision at our second meeting. Be sure
to at least read the first chapter of Chinese Capitalism
for that discussion, as well as the online readings linked below:

NB: Click on the section topic above in order to view the list
of questions for discussion in the first two seminars (Sept.
7-14).

Sept. 20

GUEST SPEAKER: David Kotz, Department of Economics and Center for Popular
Economics, University of Massachusetts, Amherst will give a lecture
titled, "System Change in the Soviet Union and China and the Lessons for a
Socialist Alternative to Capitalism."
Two papers were distributed via
e-mail,
providing two alternative theoretical paradigms for doing comparative
systems analysis, including one in which David discusses the SSA approach.
If you did not receive these papers, please
e-mail the professor.

Joseph Blasi. The Communal Experience
of the Kibbutz. (This text is available in the MHC Bookstore.)

Roy Morrison. We Build the Road as We Travel.

End Game

Dec. X

Course review. Last day
of class

Dec. X

Term paper due.

Learning Objectives:

This is a seminar course in which each student is expected to actively
participate. One of the objectives of the course is for students to learn
new theoretical tools and to sharpen existing knowledge of economics such
that she can clearly and logically analyze the similarities and differences
between economic systems and the underlying economic processes, including
processes involving and shaping the production, circulation, and distribution
of output. It is expected that students will critically examine the available
evidence for these similarities and differences. As part of this effort,
students are also expected to develop stronger skills at reading
social science to determine when authors i) have failed to carefully define
and use theoretical concepts and relationships, ii) make presumptions for
which there is little or no evidence, and iii) make generalizations when
the evidence supports, at best, only more specific cases. It is not expected
that students will come into the class knowing what capitalism, communism,
socialism, feudalism, or ancientism is. It is expected that many students
will bring to the seminar many presumptions about what these terms mean.
An important objective of the course is to examine those presumptions,
to find where the aforementioned terms have been used primarily for polemical,
rather than social scientific, purposes, and to find tentative agreement
on certain strict definitions of these terms, when possible, such that
we may have a conversation about the concrete cases under study. Towards
this objective, all students will be expected to make at least one presentation
in the course, applying the theoretical tools agreed upon, and to write
a
semester research paper that also makes extensive use of such tools.
The presentation and the paper will likely be on the same topic.

One requirement for this course is a research paper of approximately
25 pages. The research paper assignment requires that you develop a thesis
within comparative economic systems (which we will have discussed in some
detail prior to your beginning research and writing), to deploy the theoretical
tools developed in the theoretical section of the course (among other tools)
in advancing that thesis, to show that you have made a significant effort
to understand the existing literature relevant to your thesis, and to demonstrate
where your thesis and arguments fit into the relevant debate(s) in comparative
economic systems. You should indicate where you find problems with the
existing literature and where arguments within that literature have provided
the raw material for your own theoretical construction. To summarize, the
best way to organize your paper would be to take a clearly stated position
in an existing debate and defend your thesis with evidence and logical
argument.

The paper is due by the end of finals week, Dec. 20th.

Papers must be typed or produced on a printer; grammar and syntax must
be correct; and papers must adhere to scholarly format as regards citation,
footnoting, etc. (see the Chicago Manual of Style). I suggest that
you create your paper with a word processor, use the spell checker, and
keep
a backup copy.

I do not object to students discussing their papers with each other
or with anyone else. The paper you turn in, however, must represent your
unique perspective and work alone.

Each student will also be required to lead a classroom discussion of
the topics listed above. I would anticipate that two students would lead
each weekly discussion. You may want to write your term paper on a similar
topic to that of the weekly discussion you lead.